The Influence of Buying Price, Prestige Sensitivity and Brand Consciousness on Behavior and Buying Decisions of Compulsive Consumers

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Applied mathematics in Engineering, Management and Technology 2 (5) 2014:128-137 www.amiemt-journal.

1 Applied mathematics in Engineering, Management and Technology 2 (5) 2014: The Influence of Buying Price, Prestige Sensitivity and Brand Consciousness on Behavior and Buying Decisions of Compulsive Consumers Fahimeh Alsadat Afsahhosseini 1,* and Kamel Kamali 2 1 Department Of Business Management, Science And Research Branch, Islamic Azad University, Qazvin, Iran. 2 Department Of Business Management, Central Tehran Branch, Islamic Azad University, Tehran, Iran. Abstract One of the interesting issues in marketing and consumer behavior is purchase decision of the consumer and his purchase behavior and this behavior can have positive and negative aspect on welfare of a person and society. Various factors affect the purchase behavior of the consumer as cultural, social, personal and psychological factors. The present study evaluated the effect of purchase price, prestige sensitivity and brand consciousness on behavior and purchase decisions of the compulsive consumers compared to the ordinary consumers. Five variables were considered to evaluate the price effect. The study population was the women purchasing clothing from regions 1, 2 shopping centers of Tehran. The required data of the study were obtained by questionnaire among 385 purchasers and they were selected by cluster sampling method. The data analysis was done by independent t-test and one-way variance analysis. The results showed that there was no difference between the compulsive and ordinary buyers in price sensitivity, consciousness to the store price and inclination to purchase from the auctions. It was defined that compulsive buyers were more sensitive to the transaction value of the price discounts and infer the quality of the product from its price. Prestige sensitivity and brand consciousness are other features that compulsive buyers show more than ordinary buyers. Keywords: Compulsive buying, Price consciousness, Price consciousness, Brand preference, Buying behavior 1.Introduction Perceiving the consumer behavior and customer recognition are not simple. The customers can show their needs and desires in one way but act in another way. It is possible they are not aware of their internal deep motivations or react to the effective factors changing their beliefs at the last moment. Therefore, the marketers should investigate the demands of their customers, their mental receiving and buying behavior (Philip Kotler, 2006). One of the interesting issues in marketing and consumer behavior is purchase decision of the consumer and his purchase behavior and this behavior can have positive and negative aspect on welfare of a person and society. One of the different types of purchase behaviors the sellers are interested is compulsive buyingof people. The researchers know compulsive buyingchronic purchases, repetitive that is manifested as an initial reaction to the negative events and feelings (Faber and O Guinn (1989). This type of purchase leads to extravagance, debt and one s bankruptcy (Lee &Mysyk (2004)). To have an exact understanding of the effect of consumption processes on the society and others welfare, the negative behaviors of the consumer should be studied. There is no researcher about the investigation of the role of price on behavior and decisions of compulsive buyers as consisting the great part of the purchasers. For example, are the compulsive buyers aware of the price of the existing goods in store due to their repetitive purchases or not? Or do they evaluated the quality of a product based on its price or its brand?(kukar-kinney, Ridgway and Monroe (2012)). It is important to understand the fact how the compulsive buyers processed their price information and how they reacted to the prices. These types of consumers are vulnerable to the purchase stimulations and are not dependent upon their purchase activities. Uncontrolled purchase of these people leads to the experience of financial problems, hardship and even bankruptcy, negative feelings and family arguments (Kukar-Kinney, Ridgway and Monroe, 2009). Based on the studies on compulsive buyingand identification of the adverse effects of this type of purchase on the life of one s person and society welfare, we can know about the importance of this study namely in Iran, as a few 128

2 studies are conducted in this regard. The present study evaluated the demographic factors as age, marital status and household income and also evaluated the role of price, prestige sensitivity, brand consciousness on compulsive buying behavior (compared to the ordinary buying behavior). The conceptual model and the study variables The conceptual model of the present study is shown in Figure 1. Price consciousness Store price knowledge Sale proneness Perceived transaction value Reference price Compulsive Buying & Ordinary Buying Age Sex Income.. Price-quality inference Prestige sensitivity Brand consciousness Figure 1- Conceptual model of the study Compulsive buying: Compulsive buyingsare chronic, repetitive purchases that are the first response to the negative events and feelings. In this type of buying, purchase process is the main motivation of a person for purchase not having the special goods or service (Faber and O Guinn, 1992). Price consciousness: It refers to the amount the buyers focus on searching and paying the less price for a goods or service (Lichtenstein, Ridgway &Netemeyer (1993). Store price knowledge: It is the knowledge of the consumers of the price of the various stores (Vanhuele&Dreze (2002)). Sale proneness: It is increasing the interest to respond to the purchase proposal in which the sale price is reduced (Lichtenstein, Ridgway &Netemeyer (1993). Perceived transaction value: It is mental satisfaction perception or the enjoyment of comparing the transaction price and reference price that is in the mind of the buyer of a goods (Grewal, Monroe & Krishnan (1998) Price-quality inference: It is the inclination of the consumer to infer quality of a product based on its price. These types of consumers have positive view to the prices and they think high price means better raw materials, better work and etc. As price plays an important role for these consumers, they mostly accept high price (Bettman, John & Scott (1986) 129

3 Prestige sensitivity: The purchaser feels buying costly products causes that other people think he has high social status and he is of high social class. In other words, purchasing the goods with high price is a sign for other people regarding the purchaser personality (Lichtenstein, Ridgway &Netemeyer,1993). Brand consciousness: It is the ability of a person to identify and recall a brand that is applied already. It can be said the people with brand consciousness are more inclined to buy goods from the firms with famous brands (Bouhlel, Nabil &Ghaieb (2011) 2.Review of literature Park and Burnes (2005) identified the compulsive buyers fundamentally. They found that fashion orientation had direct effect on compulsive buying. The fashion orientation had indirect effect on repetitive use of credit card and compulsive buying. Roberts &Pirog (2004) found that personal goals emphasizing on Self-acceptance and community feeling have negative relation with compulsive buying. The external goals emphasizing on the financial success from the view of others have positive relation with compulsive buying. Phau& Woo (2008) investigated the Understanding compulsive buying tendencies among young Australians. The results of the study showed that compulsive buyers consider wealth as the source of power and social prestige. They use their credit cards more than other buyers and they mostly demand for discount for their purchases. Kukar-Kinney, Ridgway and Monroe (2009) evaluated the relationship between Consumers Tendencies to Buy Compulsively and Their Motivations to Shop and Buy on the Internet. The results showed that there is a positively significant association between compulsive buyer and inclination to buy on internet because of buying capability as latently, the lack of social interactions during the purchase and positive feelings experience after the buying. Mueller et al., (2011) conducted a study titled Depression, materialism, and excessive Internet use in relation tocompulsive buying. According to the results, the people showing compulsive buyingbehavior show the symptoms of depression more and they are mostly materialist people. The internet usage for buying was more than that of ordinary buyers. Kukar-Kinney, Ridgway and Monroe (2012) investigated the role of price on buying behavior and decisions of the compulsive consumers. Their results showed that compulsive buyers were more conscious about the prices and had more knowledge about the price level of the stores. They also had more inclination to purchase from the stores in their special sale. 3.Study hypotheses Compulsive buyers are more sensitive to price than ordinary buyers Compulsive buyers have more knowledge about the price of the stores than ordinary buyers Compulsive buyers are more inclined to buy from the stores in their special sale than ordinary buyers Compulsive buyers are more sensitive to perceived transaction value arising from the price discounts than ordinary buyers Compulsive buyers infer the quality of product from its price more than ordinary buyers Compulsive buyers are more sensitive to prestige than ordinary buyers Compulsive buyers are more conscious to brand than ordinary buyers Compulsive buyers are younger than ordinary buyers Compulsive buyers are more single than ordinary buyers Compulsive buyers have more income than ordinary buyers 4.Study population The study population was all the women buying clothing from regions 1, 2 shopping centers in Tehran. Based on the study population, at first among regions 1, 2 of Tehran, based on their division to various regions, two regions were selected and from each region, two shopping centers were selected randomly. Among 10 districts of region 1, Qaem shopping center from district 7 and Nakhl from district 10 and among 9 districts of region 2, Golestan from district 7 and Nasr from district 3 were selected. The sampling was done randomly among the 130

4 buyers of clothing of the shopping centers. 430 questionnaires were selected and after excluding the incomplete questionnaires, 385 questionnaires were analyzed. Study measure In the present study, for data collection, a questionnaire was used as the main instrument of data collection. This questionnaire is including two parts of specialized and general questions (individual information as age, marital status and household income). Regarding specialized questions, there were some questions to evaluate some variables as compulsive buying, price consciousness, store price knowledge, Sale proneness, perceived transaction value, price-quality inference, prestige sensitivity and brand consciousness. The scale to evaluate the specialized questions was five-item Likert scale. The calculated Cronbach s alpha of 385 questions that were distributed among the subjects is as followings: Table 1- Cronbach s alpha calculated for questionnaires Dimensions Questions Cronbach s alpha coefficient Compulsive buying Price consciousness Store price knowledge Sale proneness perceived transaction value price-quality inference prestige sensitivity Brand consciousness Total questionnaire Study findings To test the study hypotheses, two tests of mean comparison of two population (independent t-test) and one-way variance analysis are applied. All the hypotheses are investigated one by one: Hypothesis 1: The compulsive buyers are more sensitive to price than ordinary buyers. It can be said that compulsive buyer is the one the mean of his answers is in Likert scale higher than 3. Price consciousness Table 2- The comparison of compulsive and ordinary buyers in terms of price Variance equality Variance inequality The results of Table 2 showed that significance level was higher than 0.05 and the variances are equal and we use the first row for interpretation. The significance level for t was more than 0.05 and hypothesis 1 is not supported, it means that price consciousness had no significant difference among the compulsive and ordinary buyers. Hypothesis 2: The compulsive buyers had more knowledge to store price than ordinary buyers. 131

5 Table 3- The comparison of compulsive and ordinary buyers in terms of more knowledge about price of the stores Store price knowledge Variance equality Variance inequality The findings of Table 3 showed that significant level of t was higher than 0.05 and hypothesis 2 is not supported. It means that price knowledge had not significant difference among the compulsive and ordinary buyers. In the Table 1, the mean of consciousness was more among the compulsive buyers than ordinary buyers but this issue is not supported with confidence interval. Hypothesis 3: Compulsive buyers compared to ordinary buyers were more inclined to buy from the stores in special sale position. Table 4: The comparison of compulsive buyers and ordinary buyers inclined to purchase from the stores with special sale Sale proneness Variance equality Variance inequality Here, in the first stage, significance level is lower than 0.05, thus, the variances are unequal and the second row is used for interpretation. Later significance level (for t) is more than 0.05 and hypothesis 3 is not supported. It means that Sale proneness was not significantly different among the compulsive and ordinary buyers. In the first table, the mean of Sale proneness among the compulsive buyers was more than that of ordinary buyers but this is not supported by confidence interval, Hypothesis 4: Compulsive buyers compared to ordinary buyers in terms of transaction value of price discount Table 5- The comparison of compulsive buyers and ordinary buyers to the transaction value arising from price discount Perceived transaction value Variance equality Variance inequality Findings of Table 5 showed that significance level was more than 0.05 and the variances are equal and we use first row for interpretation. Significance level (t) is less than 0.05 and upper and lower limits are negative. Thus, hypothesis 4 is supported. Hypothesis 5: Compulsive buyers compared to ordinary buyers infer more the quality of a product of its price. 132

6 Table 6- The comparison of compulsive and ordinary buyers to the price-quality inference Quality-price inference Variance equality Variance inequality Findings of Table 6 showed that significance level was more than 0.05, thus the variances are equal and we use the first row for interpretation. Later significance level (t) is less than 0.05 and upper and lower limits are negative. Thus, hypothesis 5 is supported. Hypothesis 6- Compulsive buyers compared to ordinary buyers are more sensitive to prestige Table 7- The comparison of compulsive buyers and ordinary buyers to prestige Prestige sensitivity Variance equality Variance inequality The findings of Table 6 showed that significance level is lower than Thus, variances are unequal and the second row is used for interpretation. The significance level (for t) is lower than 0.05 and upper and lower limits are negative. Thus, hypothesis 6 is supported. Hypothesis 7- The compulsive buyers are more conscious to brand than ordinary buyers Table 8- The comparison of the compulsive buyers and ordinary buyers to the brand consciousness Brand consciousness Variance equality Variance inequality Here in the first stage: The significance level is less than The variances are unequal and the second row is used for interpretation. The significance level (t) is lower than 0.05 and upper and lower limits are negative and hypothesis 7 is supported. Hypothesis 8: The compulsive buyers are younger than ordinary buyers Here, variance analysis test is used. One-way variance analysis test or ANOVA is used to test the mean difference of a variable among two groups or more. If the significance level is higher than 0.05, the effect of independent variable of grouping on quantity variables is negated. There is a comparison of variables based on respondents age. The significance level is higher than 0.05, it means that the mean of the responses of compulsive buyingquestions had no significant difference among various ages (Table 9). 133

7 Perception environment Table 9- The age comparison of the compulsive and ordinary buyers The sum Degree of Mean Mean square Significanc of F square treatments e number freedom treatments of Inter-group Intra-group Total According to LSD test, there was a significant difference between two age groups under 20 and above 50. According to the outputs, the buyers under 20 were more compulsive than the buyers above 50 old. There was no significant difference among other age groups. The results are summarized in the following table. (I) x1 Below Above 51 (J) x1 Table 10- LSD test of age variable Mean difference Standard error Significa nce level Confidence interval Above 51 Below Above 51 Below Above 51 Below Above 51 Below

8 Hypothesis 9- Compulsive buyers are more single than ordinary buyers Table 12- The comparison of the compulsive buyers with single and married buyers F Sig t df T sig Marital status Variance equality Variance inequality The findings of Table 12 showed that significance level is higher than 0.05 and the variances are equal and we use the first row for interpretation. Later, the significance level (t) is lower than 0.05 and upper and lower limits are positive. Thus, hypothesis 9 is supported. It means that the compulsive buyers are more single. Hypothesis 10: The compulsive buyers have high income compared to ordinary buyers Here, variance analysis is used. If significance is more than 0.05, the effect of independent variable of grouping on quantitative variables is negated. Here, the model variables are compared based on the income of the respondents with each other. Table 13- The comparison of the compulsive buyers and ordinary buyers in terms of income Degree Sum of of Mean square F sig square freedom Perception of environment Inter-group Intra-group Total To know more about the difference, LSD test was used and the results with paired comparison are summarized as: (I) x1 Below (J) x Above Below Above Below Table 14: LSD test of income variable Mean differences 135 Standard error sig Confidence interval lower upper

9 (I) x Above (J) x Above Below Above Below Mean differences Standard error sig Confidence interval lower upper Based on the results, it can be said that income group 5 is more compulsive than income group 1, 2, 3, 4. The income group 4 is more compulsive than income group 2 and income group 3 is more compulsive than income group 2. 6.Discussion and Conclusion Price consciousness had no significant difference among the compulsive and ordinary buyers. Price consciousness had no significant difference among the compulsive and ordinary buyers. Sale proneness had no significant difference among the compulsive and ordinary buyers. Sensitivity to transaction value of price discount among the compulsive buyers was more than ordinary buyers. The quality-price inference was more among the compulsive buyers than ordinary buyers. The prestige sensitivity among the compulsive buyers was more than ordinary buyers. Brand consciousness was more among the compulsive buyers than ordinary buyers. Based on the outcome, the buyers below 20 old were more compulsive than the buyers above 50 old but there was no significant difference between other age groups in terms of compulsive buyingvariable. The compulsive buyers were more single than ordinary buyers. In other words, the mean of this variable was high among the compulsive buyers than ordinary buyers. Based on the studies and results, the following recommendations are presented: As compulsive buying is destructive as other addictions from social, psychological and economic aspects, a person is mostly involved with mental crises. It is recommended to these people to think before purchase and make a list of their required items and only buy what are defined already. They can improve their mental health via other methods than purchase. They should pay attention to the time they spend in shopping centers. This time can be spend with planning as useful. Inclination to variety of purchases and buying more items than need lead to consumption based and lavish style of life. People have various models for purchase and we can evaluate their mental health percentage based on this model. Thus, the families should consider the purchase model of their children. It is recommended to the families in case of compulsive buying inclinations among their children, they refer to the psychologists to solve 136

10 this problem as most of the tendencies are formed in childhood and it will be difficult to cure them later. The treatment success is high in childhood. Famous brands use advertisement to increase their sale. It seems that compulsive buying is increased by some factors as fashion and advertisement. Correct selection and having a good plan during purchase shows thinking independency and decision making power and this leads to achieving the best result. In the current societies, using selection power and achieving suitable purchase skills based on goods variety is one of the main components and the suitable model should be established in this regard in the families. Reference Kotler, F; Armstrong, G The marketing principles.rozbahan publications. Belk, R.W. (1988). Possessions and the extended self.journal of Consumer Research, 15, pp Bouhlel, O., Nabil, M., &Ghaieb, S. (2011). singles: An expanding market. Journal of business management dynamics, 3, Faber, R. J., &O Guinn, T. C. (1992). A Clinical Screenerfor Compulsive Buying, Journal of Consumer Research, 19(12), pp Grewal, D., Monroe, K. B., & Krishnan, R. (1998). The Effects of Price Comparison Advertising on Buyers Perceptions of Acquisition Value, Transaction Value and Behavioral Intentions. Journal of Marketing, 62(4), pp Kukar-kinney, M., Ridgway, M., & Monroe, K. (2012). The Role of Price in the behavior and purchase Decisions of Compulsiv Buying. Journal of retailing, 88(1), pp Kukar-Kinney, M., Ridgway, N. & Monroe, K. (2009). The Relationship between Consumers Tendencies to Buy Compulsively and Their Motivations to Shop and Buy on the Internet.Journal of Retailing, 85(3), Lee, SH., Mysyk, A. (2004). The medicalization of compulsive buying.journal of social science and medicine, 58(9), pp Lichtenstein, D. R., Bloch, P. H.& Black, W. C. (1988). Correlates of Price Acceptability.Journal of Consumer Research, 15(9),pp Lichtenstein, D. R., Ridgway, M. N., &Netemeyer, R. G. (1993) Price Perceptions and Consumer Shopping Behavior: A Field Study. Journal of Marketing Research, 30(5), pp Muellera, A., Mitchellb, J. E., Peterson, L. A., Faber, R. J., Steffenb, K. J., Crosby, R. D., &Claesd. L. (2011). Depression, materialism, and excessive Internet use in relation tocompulsive buying.journal of Comprehensive Psychiatry, vol 52, pp Park, H.& Burns, L. D. (2005). Fashion Orientation, Credit Card Use, and Compulsive Buying.Journal of Consumer Marketing, 22(3), pp Phau, I., & Woo, CH. (2008). Understanding compulsive buying tendencies among young Australians: The roles of money attitude and credit card usage. Journal of Marketing Intelligence & Planning, Vol. 26(5), pp Roberts, J. A., &Pirog Iii, S. F. (2004). Personal Goals and Their role in Consumer Behavior: the Case of Compulsive Buying.Journal of Marketing Theory & Practice, 12(3), pp Vanhuele, M.,&Dreze, X. (2002). Measuring the Price KnowledgeShoppers Bring to the Store.Journal of Marketing, 66(10), pp

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